view from the top
Expecting the Unexpected
Know what to do when tragedy strikes.
Gary Gerber, O.D.
While good for
our consulting business, there's a certain type of phone call that we
nonetheless dread receiving:
recently become disabled and can no longer see patients."
husband passed away and I don't know what to do with his practice. Can you help
Ready yourself for the worst
can help, but we could've done more had these untimely incidents been
anticipated. Human nature has us file things like this under, "It'll never
happen to me." But as a consultant, I've seen that these things do happen
ILLUSTRATION BY ALAN KING
Are you and your family prepared for this type
of unfortunate outcome? You undoubtedly have professional liability insurance,
but do you have a game plan to protect you if a significant disability or
extended interruption of business falls upon you?
the following items available for a trusted source to help cope with unexpected
Insurance (life and
disability). Not all of us have this, but I recommend it (especially
disability) to everyone -- even those who don't have families. Several types of
policies are available (e.g., those that will only pay if you can't perform any
job or will only pay if you can't perform as an O.D.).
agent can adjust premiums up or down depending not only on the amount of
insurance, but also on how soon it starts paying after you become disabled. Make
sure someone reliable knows where the policy is and what it entails. Disability
insurance is a good idea, as it pays for fixed expenses for a predetermined
amount of time. In group/partner practices, it's not necessary unless you want
coverage for more catastrophic loss such as a natural disaster.
you have a group or partner in your practice, then consider getting disability
buy-out insurance on him/them. That way, should they die or become disabled,
insurance would cover the price of their equity in the practice. This makes any
needed transitions easier and faster. Again, have the value of the practice
drawn up in advance and have enough insurance to cover your partner's share of
that price. (You can have this written up as part of the buy-sell agreement.)
appraisal. A qualified, accurate appraisal can take some time to
complete. After the death of a practice owner, the value of a practice may start
to drop precipitously. Having to wait for an appraisal can cost the practice
heirs valuable time and money. Instead, have your practice appraised at regular
intervals and as above, make sure someone trustworthy and reliable knows where
to find the appraisal.
Several areas of the country have optometry labor co-ops. Each doctor splits the
time in the particular office based on a pre-determined and agreed upon formula.
(Both parties also agree on compensation in advance.) Another particular to
consider is whether the co-op, either collectively or its interested individual
members, have the first right of refusal to purchase a practice that may become
Practice plan and manual.
Having a practice plan and manual in your practice helps with the day-to-day
running of a vibrant and healthy practice.
yourself some options
Let's hope that
injury never happens and that death happens years from now, but if/when it does,
make sure you're prepared by following some of these suggestions.
Dr. Gerber is the president of the Power
Practice, a company specializing in making optometrists more profitable.
Learn more at www.powerpractice.com
or call Dr. Gerber at (800) 867-9303.
Optometric Management, Issue: July 2004